L.A. expected to soon debate raising minimum wage for hotel workers

By By James Rainey

Jan 13, 2014 | 4:57 PM

Los Angeles could soon take the national lead in dramatically raising the minimum wage — with members of the City Council expected to propose that large hotels be required to pay roughly $15 an hour to their workers.

That rate would more than double the national minimum of $7.25 an hour and push far above California's rate of $8. Union leaders want the increase to apply at hotels with 100 rooms or more, saying such a hike would lift housekeepers, busboys and maintenance workers out of poverty and inject much-needed cash into a still languorous local economy.

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Council members were expected to bring the proposal forward in the coming weeks. Most declined to discuss how they would vote, though Councilman Paul Koretz called the $15 rate "reasonable in a city where costs are so high." The political debate is expected to take months, with the precise rate and size of hotels affected subject to change as the hotel lobby attempts to resist.

But the liberal Democrats who dominate city government have a history of cooperation with organized labor, and council leaders have signaled they believe the measure has a good chance of passing. Without offering details, a spokesman said Mayor Eric Garcetti supports "building pathways to the middle class."

Previous "living wage" ordinances in Los Angeles have focused on narrower bands of the economy. Under a 1999 city law, employees at Los Angeles International Airport get at least $15.67 an hour. And workers at 13 hotels near the airport earn a minimum of $11.97, thanks to a 2007 ordinance.

The latest proposal — $15.37 — would apply to 87 hotels across the city and an estimated 10,000 employees, only some of whom are now unionized. Labor leaders hope it will be just the first step toward minimum pay hikes for many other workers.

"We would absolutely like to extend this to other industries," said Maria Elena Durazo, chief of the county Federation of Labor. The organization plans to unveil billboards Tuesday, in the form of faux Los Angeles city signs that say "City Limited" and "Poverty Wage Pop. 810,864."

The push on behalf of hotel workers epitomizes the issue's momentum nationally. A study last year showed the income divide between the upper 1% and the rest of America at its widest point since the 1920s. If minimum pay proposals in five states go forward this year, more than half the states — the most ever — would mandate pay higher than the federal minimum.

Polls show the increases usually are popular with the public and that makes them a preferred debating point for Democrats, who have been forced to defend themselves over the troublesome rollout of the national healthcare law. President Obama supports a Democratic proposal to raise the national minimum to $10.10 an hour (over two years) and recently called income disparities "the defining challenge of our time."

Hotel owners and their representatives intend, however, to mount stiff opposition to the Los Angeles proposal. They say a $15 minimum would trigger higher room rates and worker layoffs, as managements struggle to keep costs under control. The owners argue it's unfair to take a piecemeal approach to pay rules — singling out a few industries or geographic areas.

"It makes no sense to go … city by city and industry by industry," said Carol Schatz, head of the Central City Assn., which represents downtown Los Angeles business interests. "The hotel industry is the victim this time, but who is next: computer programmers, taxi drivers, restaurants? Where does it end?"

Unite Here Local 11 and a web of liberal groups called Raise L.A. are planning an array of actions and already have lined up support from 750 local business owners, who say higher wages will spur economic growth. Los Angeles activists believe their cause will be advanced if the public learns more about the challenges facing low-wage workers like those helping the Unite Here Local 11 campaign.

In a recent interview, one housekeeper for a pair of Los Angeles hotels described her days vacuuming, scrubbing toilets and changing linens on as many as 26 beds per shift. At one hotel, in Hollywood, she makes $8.25 an hour. At the other, in downtown Los Angeles, she earns almost twice as much — a union-negotiated $15.92.

When she doesn't draw enough hours at the downtown hotel and has to rely on the Hollywood job, the housekeeper said she struggles just to cover the $1,300 rent she owes on the South Los Angeles house that she shares with her husband and 9-year-old son.

"Many people don't understand how hard we are working," said the 51-year-old, who spoke on condition of anonymity for fear of alienating her bosses. "At $15, we can make it. We can live just a little bit better, not drowning all the time."

Unite Here leaders hope that City Council members will peg the wage proposal to the 1999 law that extended a "living wage" from city contractors to workers at LAX, including janitors, retail clerks and food service workers. With cost-of-living increases, the LAX minimum stood at $15.37 before a recent hike. The hotel workers union wants the citywide hotel ordinance set at that level.

The Los Angeles debate will come just months after voters in the small Washington city of SeaTac approved a $15 wage for workers at Seattle-Tacoma International Airport. A judge overturned parts of that measure. The new mayor of Seattle subsequently said he wanted to increase the minimum wage to $15 for 600 workers in the city who make less.

The notion of a $15 wage requirement first made headlines in Los Angeles during last spring's race for mayor, when union leaders suggested it would be approved if Garcetti opponent Wendy Greuel won. Then late last year, a group of labor and liberal groups gathered at the headquarters of the county federation to discuss their campaign for higher wages. Tom Walsh, president of the hotel and restaurant workers union Unite Here Local 11, told the group that 40% of hotel workers now make less than the federal poverty level, which stands at $23,550 for a family of four.

Such low-wage workers are ultimately subsidized by taxpayers, Walsh said, when they are forced to rely on public health clinics, food stamps and other government programs.

As the recession ends, "There is supposed to be some improvement in the economy, but it is only going, so far, to help big business," Durazo, executive secretary-treasurer of the county labor federation, AFL-CIO, told the gathering. "We have to take matters into our own hands, because business is not doing it on their own."

When union leaders focused on hotel workers' wages in 2007, advocates argued that the city could impose the higher pay because the hotels along Century Boulevard benefited from traffic generated by a municipal asset, the airport.

Durazo said there is now a need for a broader-based increase, because wages have not kept pace with inflation. She said $15 an hour became the goal because "that gets you up to $30,000 [a year] if you work 2,000 hours. That is above a poverty wage and you can begin to support a family with less public assistance."

Voters in Long Beach approved a ballot measure in 2012 that increased wages for hotel workers to $13 an hour. Bob Amano, executive director of the Hotel Assn. of Los Angeles, said two of the bigger hotels in the city reported increased costs in the first year of $800,000 and $1.5 million, respectively. As a result, he said, price increases and job cuts were inevitable.

The organizers of the campaign, including the Los Angeles Alliance for a New Economy, said they are prepared to rebut charges that higher wages are anti-business. Among those they hope will testify on their behalf — some of the 35% of hotel owners in L.A. already paying $15 or more.

Only a fraction of hotels in the city employ union workers. The ordinance would provide an exemption from the $15 rate to hotels that sign union contracts.

"So the question is, is this about wages or is this about selling union memberships?" said Gary Toebben, president of the Los Angeles Area Chamber of Commerce.

Durazo said unions prefer the flexibility of contracts, including the ability to decrease wages and benefits when they see that an employer is in distress. But she said most owners have opposed union organizers so adamantly that the only way to make progress was through a broader "living wage" law.